The hard task of valuing a Nigerian digital bank
Banks and their valuations. Source: Stears Business

Venture Capital (VC) firms are on a spending spree, and digital banks worldwide are raising record-level funding. In India, Jupiter raised $44 million on a $300 million valuation in August. In Brazil, digital bank Nubank is targeting a much higher valuation of $55 billion in its Initial Public Offering (IPO). Meanwhile, in Nigeria, Kuda bank secured $55 million in its Series B round in August at a valuation of $500 million.

To some, especially traditional finance observers, these valuations sound like the dot–com bubble all over again. To others, these numbers reaffirm that investors are betting on a world where technology is king, a world where only technology-centric companies triumph.

Whichever way you view it, the question of how valuations get calculated is an ongoing debate. And at the centre of it are two groups with high stakes—the investors who bet and the companies being betted on.

Therefore, as we

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Carl T. Macaulay

Carl T. Macaulay

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